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News Link • Depression

Explaining the Depression

• Gary North via

So, you want to understand what happened to the economy in 2008? I have an answer. It's a poem.

Why a poem? Because people can follow a poem, if it's not too poetic, better than they can follow detailed chains of economic reasoning.

Poems can have great influence. It is safe to say that the most influential poem in the history of the West is the 23rd Psalm. It has shaped how we look at personal cause and effect in history. I argue that the second most influential poem has been "The Grumbling Hive," better known as the "Fable of the Bees." The original was published in 1705. The update, published in 1714, was accompanied by two fat volumes of social theory based on the poem. The book is still in print.

The author, Bernard Mandeville, was a dentist in England who had immigrated from the Netherlands. His poem was meant to shock, and it did. Its subtitle was "Knaves Turned Honest." It is the story of society. Society is filled with knaves in every field. He begins, appropriately, with lawyers. Then he goes to physicians, then priests, then soldiers, then advisers to kings. They cheat. They lie. They grow rich. And they spend.

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